Global Markets:
- Asian stock markets: Nikkei up 0.40 %, Shanghai Composite gained 1.90 %, Hang Seng rose 0.90 %, ASX fell 2.00 %
- Commodities: Gold at $1088 (-0.20 %), Silver at $14.66 (-0.10 %), WTI Oil at $44.84 (+0.40 %), Brent Oil at $49.78 (+0.20 %)
- Rates: US 10 year yield at 2.23, UK 10 year yield at 1.93, German 10 year yield at 0.71
News & Data:
- Bank of Japan Interest Rate 0.10 %, Expected: 0.10 %, Previous: 0.10 %
- Australia Investment Lending (MoM) Jun: -0.7% (prev rev -3.5%)
- Australia Home Loans (MoM) Jun: 4.4% (exp 5.0% prev rev -7.3%)
- Australia AiG PCI (Jul): 47.1 (prev 46.4)
- RBA SoMP: Will Continue To Assess Outlook, Adjust Policy As Needed
- RBA: Reasonable Chance A$ Will Fall When Fed Raises Rates
- RBA: Signs Lower A$ Is Supporting Demand For Domestic Goods
- RBA: Sees 2%-3% Average GDP Growth In 2016 (prev) 2.5%-3.5%
- RBA: Inflation Forecast Revised Up, Seen At 2.5% Next 2 Years
- Bank of England's Broadbent: Foolish For MPC To Predict Timing Of Rate Hike
- Broadbent: Economy Well Into Recovery Process, Not Much Inflationary Pressure At Present, Will Grow
- Broadbent: Must See Balance Of Risks On Inflation Over Target For Hike, No Urgency To Hike Presently
Markets Update:
The Pound fell sharply yesterday after the Bank of England was more dovish than expected. Traders were expecting a 7-2 vote for keeping rates unchanged, but the vote was 8-1, signaling that a rate hike may come later than anticipated. In the press conference, BoE Governor Carney mentioned the Sterling’s strength impacting on exports and keeping inflation is check. GBP/USD reached a low of 1.5465 and has settled around 1.5520 in Asia. The ascending channel support remains intact for now, but a break sub-1.5450 would signal a change in the short-term trend and pave the way for a 1.5330 (early July low) test.
Today’s main event will be the NFP release at 13:30 BST. As a September rate hike by the Fed is not ruled out yet, this NFP will be one of most important ones. The market is expecting a 223k print. Anything above 250k would likely lead to a strong USD rally, while any number below 200k would be seen as disappointment.
Upcoming Events:
- 06:45 BST – Swiss Unemployment Rate
- 07:00 BST – German Trade Balance
- 07:30 BST – Bank of Japan Press Conference
- 09:30 BST – UK Trade Balance
- 13:30 BST – US NFP
- 13:30 BST – US Unemployment Rate
- 13:30 BST – US Average Hourly Earnings
- 13:30 BST – Canadian Employment Change
- 13:30 BST – Canadian Unemployment Rate
- 15:00 BST – Canadian Ivey PMI
